In Hungary there are several, various company forms, from which you can choose the most suitable for your business operations in Hungary, depending of the annual turnover of your company, the number of your transactions and the number of your employees. Please let us give you a brief introduction of the most popular company forms in Hungary.
|Type of legal entity||Short name||International name||Minimum amount of shared capital||Minimum number of shareholders||Personal liability||Minimum number of managing directors|
|Betéti Társaság||Bt.||Limited Partnership||nothing||2||1 shareholder unlimited, 1 limited||1|
|Korlátolt Felelősségű Társaság||Kft.||Limited||3.000.000 HUF||1||limited||1|
|Részvénytársaság||Zrt.||Private Limited Company by Shares||5.000.000 HUF||1||limited||1|
The Bt. is mostly recommended for companies, which will have especially low annual turnover.
In case of Bt’s no authorized capital is needed for establishing it (however we always suggest our clients to incorporate it with at least a minimal 100.000 HUF amount).
The Bt. must have at least one general partner, and one limited partner. The general partner’s responsibility is unlimited, and it is equivalent with the other general partner’s. The limited partner is only obliged to provide his/her deposit undertaken by the Articles of Association.
The Bt’s supreme organ is the Assembly of Members, which must be convened at least once a year. The company is responsible for its liabilities, with all his assets. If the company’s assets do not cover its liabilities, the general partner(s) are responsible for them, in unlimited way, with all his/her/their assets.
The Bt’s English equivalent is the LP, its German and Austrian is the KG.
The Kkt. is also recommended if you except a low turnover, since no authorized capital is required.
The Kkt. is very similar to the Bt., the only difference is that in this case all the members’ responsibility is unlimited with all their assets for the possible debts of the company which can’t be covered from the assets of the company.
The Kft. is the most favourable corporate form in Hungary for small- and medium sized businesses. It is a type of business organization, which starts with an authorized capital with a specified amount of capital contributions.
The authorized capital for the Kft. is 3.000.000 HUF (approximately 8500 EUR), which can be spent on company-related expenses after the incorporation. Even one member is enough to establish a Kft. in Hungary.
The obligation of the members extends up to the paid amount of their own contribution basically. The managing director is liable in unlimited way, with all his/her assets for the debts of the lenders in case on intentional damage.
The Kft’s supreme organ is the Assembly of Members, which must be convened at least once a year. The managing director is responsible for managing the company’ s affairs. The managing director has to provide information for the members, about the company’s data.
The Kft’s English equivalent is the LLC, its German and Austrian is the GmbH.
The Zrt is a type of the share companies, but its stock can’t be placed on the stock exchange.
The authorized capital for the Zrt. is minimum 5.000.000 HUF (approximately 14.000 EUR), due to that the shareholders have no underlying responsibility against the creditors. The amount of the contribution in cash can’t be less than 30% of the authorized capital at the time of establishing the company. The shares has to be issued in a dematerialized or in paper-based form.
The Zrt’s supreme organ is the General Assembly, which must be convened at least once a year.
The company’s shares can be transferred easier than in case of a Kft., therefore if you plan to involve other external investors later, this company type can be the most appropriate for you.
Its German and Austrian equivalent is the AG.
If you expect a low turnover, it can be also appropriate for you if you register yourself as a sole trader in Hungary.
The sole traders in Hungary are recorded by the National Tax Authority not by the Court of Registry, therefore this is not a company type but business activities can be performed as a sole trader as well.
It is a favorable condition that the KATA taxation can be choosen and there is no required minimum amount for a shared capital. However it is important that if you register yourself as a sole trader you will be responsible for all occuring debts with your assets, and before you could register yourself a Hungarian residential address is required.